PBOC Deputy Urges Private Role in Sovereign Debt Restructuring

China’s deputy central bank governor Xuan Changneng called for greater private-sector participation in sovereign debt restructuring as rising borrowing costs add to developing countries’ debt-servicing burdens.

Xuan urged the creation of an effective mechanism to ensure private creditors participate comparably in debt restructurings, the People’s Bank of China said in a statement on Sunday. He also urged improvements to the International Monetary Fund and World Bank debt-sustainability framework for low-income countries.

Xuan made the comments during the IMF and World Bank annual meetings in Bangkok, where he attended the Global Sovereign Debt Roundtable and other meetings last week.

He also said China will expand domestic demand and advance investment in infrastructure including water, power grids, computing, communications, urban pipelines and logistics.

China will combine investment in physical assets with investment in people and promote high-quality, efficient development of the services sector, Xuan added.

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